NEWARK-New Jersey is running out of land on which to build new commercial real estate projects, but the state still must find a way to grow its economy, particularly in the face of current economic conditions. Some of the roadblocks and ultimately the solutions for accomplishing growth provided the focus of discussion at the third-annual Urban Developer’s Night, hosted by the Industrial and Office Real Estate Brokers Association of the New York Metropolitan Area at the Robert Treat Hotel here.
“New Jersey will truly be the first state in the nation to reach full build-out,” said Ted Zangari, a member of the law firm Sills Cummis & Gross. The answer, he adds, is redevelopment, particularly in New Jersey’s cities, and the challenge is to pave the way by creating a development-friendly but sensible regulatory climate. That process began three years ago with formation of the Smart Growth Economic Development Coalition, of which Zangari is the founder. IOREBA is one of 28 business and trade associations that make up the Smart Growth Coalition.
“In 2007, we held a retreat with the charge of identifying all crises tied to the longer term problem of supply of land,” he said. Besides the dwindling supply of developable land, those crises included condemnation issues, site contamination, the cost of decked parking--the latter a necessity in most redevelopment areas--and more.
The result of the coalition’s activities to date includes the New Jersey Economic Stimulus Act of 2009, Zangari reported, a multi-faceted legislative effort that includes the Economic Redevelopment Growth Grant program, which provides tax increment financing; a moratorium on the affordable housing fee for certain non-residential projects; an expanded Urban Transit Hub Tax Credit program; and a new tax credit for developers of residential projects in urban transit hubs. “No state has anything like these new incentives,” Zangari said.
Other accomplishments, he explained, have included the permit extension act, providing breathing room for projects delayed for economic and other reasons; and the Licensed Site Remediation Professional program, aimed at speeding up the approval process for site clean-ups.
Noting that New Jersey already had the heralded Business Employment Incentive Program and Business Retention and Relocation Assistance Act Grant programs in place, “The Depository Trust didn’t bring 1,600 jobs to Jersey City on BEIP alone” Zangari said, referring to a major New York-to-New Jersey relocation. “The deal closed only because of ERGG and a city pilot program.”
With New Jersey nearing build-out and urban redevelopment a key, “we want to differentiate downtowns from the suburban malls,” Zangari said, adding that still more programs are in the works. “We have to figure out this state holistically, and smart growth is the key.”
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